By Adedapo Adesanya
Professional services firm, PwC Nigeria, has noted that consumer spending will be pressured in 2024 due to rising prices of goods and services as a result of increasing food prices and transportation costs.
The firm disclosed this in its latest Nigeria Economic Outlook, where it highlighted trends that will shape the nation’s economic trajectory in 2024.
The PwC report projects that the pressure on consumer spending this year will be coupled with lower disposable income.
It added that however, “private consumption is expected to be marginally better than 2023.”
Nigerians have faced increased pressure on consumption due to the double-whammy of the removal of fuel subsidies and the unification of exchange rates introduced by President Bola Tinubu which has seen the price of goods and services skyrocket.
PwC warned that poverty levels are projected to increase to 38.8 per cent in 2024.
“Despite the low unemployment rate in the country, low consumer spending and purchasing power remain an issue, especially in the absence of a commensurate increase in the minimum wage to mitigate the inflationary growth in the economy.”
The tussle for a new minimum wage review started last year with the Nigerian labour unions embarking on a series of protests and strikes last year following an increase in the cost of living caused by the removal of fuel subsidies.
In June 2023, labour leaders called on the government to increase the minimum wage from N30,000 to N200,000 to meet the current economic realities.
The minimum wage was last reviewed in April 2019 from N18,000 to N30,000.
PwC also warned of persisting vulnerability to external pressures with geopolitical, economic, environmental, political, and trade shocks set to shape the dynamics and outlook for the Nigerian economy in 2024.
“If the Russia-Ukraine war intensifies, it could lead to increased global energy and commodity supply risks.
“Nigeria may experience increased inflation and food security challenges due to grain import disruptions and high petroleum product cost.
“The outcome of elections in several countries globally, especially USA, UK, and Taiwan may shape the dynamics of trade and capital flows around the world in 2024,” it warned.
Dipo Olowookere